According to CoinMeta, the U.S. Securities and Exchange Commission (SEC) is closely monitoring artificial intelligence (AI) companies, particularly their disclosures and circular trading practices. SEC Enforcement Director David Woodcock told Reuters on October 30 that as concerns over inflated valuations, circular investments, and large infrastructure commitments increase, the SEC is reviewing the relevant disclosures of these companies. "Whitewashing" refers to companies exaggerating or misrepresenting their capabilities, adoption rates, or financial benefits. In March 2024, regulatory authorities filed lawsuits against investment advisors for making misleading statements regarding certain practices, and ultimately both companies agreed to pay civil fines of $400,000 each. Similar cases include one where a company raised nearly $4 million by misleading investors; in October 2024, that company was announced to have been fined $310,000. These cases indicate that securities laws also apply to the claims made by AI companies.